‘Economics of madhouse’ drive up motoring costs

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The “dirty secret” of the insurance industry that has fuelled a surge in motor premiums is exposed today in a damning investigation by Jack Straw, the former Justice Secretary.

As part of a wide-reaching investigation into the “dysfunctional” market for personal injury insurance, Mr Straw has established that motor insurance companies have been selling on the personal details of customers to claims management firms and “ambulance chasing” lawyers. His report also reveals that:

• Unscrupulous advisers have been exploiting lax rules on proving “whiplash” injuries to drive a sharp increase in claims and payouts.